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2015 4Q Earnings Release

2016-01-29
Samsung Electro-Mechanics announces its 2015 4Q records

KRW 1.362 trillion in sales revenue and KRW 20.6 billion in operating profits for the 4th quarter of 2015
- Sales revenue decreased by 13% and 15% respectively compared with the same quarter (2014 4Q) of the last year, and the previous quarter (2015 3Q).
- Because of impacts from inventory adjustment, the demand for flagship models of the main business partners decreased.

KRW 6.176 trillion in sales and KRW 301.3 billion in operating profits per annum in 2015
- Sales revenue increased by 1.2% and operating profits increased by KRW 236.4 compared with 2014.

Enhancing profits and strengthening competitiveness through launching on a wider scale in the markets in China in 2016 and promoting new businesses such as automobile for future growth

January 29, 2015

Samsung Electro-Mechanics’ announced on the 28th that it recorded KRW KRW 1.362 trillion in sales revenue and KRW 20.6 billion in operating profits for the last 4th quarter based on the consolidated financial statement. Sales revenue decreased by 13% and 15% compared with the same quarter (2014 4Q) of the last year, and the previous quarter (2015 3Q) respectively.


However, it recorded KRW 1.176 trillion in sales and KRW 301.3 billion in operating profits per annum in 2015, showing that the sales revenue is similar; however, the operating profits increased by KRW 236.4 billion compared with those of last year.


The company explained that the company’s sales revenue increased in high value–added products, such as high-end chip parts and OIS camera modules, because its main business partners moved toward high specifications and launched new models and expanded; in addition, the markets in China have expanded as well. The company’s business performance also improved because of the efforts to strengthen its manufacturing competitiveness, make the internal input resources efficient, and reduce costs.

※ Performance of individual sectors of the 4th quarter, and the promotion strategy for 2016

The [Digital Module] sector recorded KRW 573.6 in sales revenue, which is 14% lower than that of the previous quarter and 13% lower than that of the same quarter of the last year because the sales revenue in camera modules and Wi-Fi modules decreased because of the impacts of the reduced demand for the flagship models of the strategic business partners.
As a promoting strategy for the future, the company will strengthen competitiveness in differentiated camera module products that have high functionality, and will expand the product lineup for pioneering in the markets for the popular items. When it comes to the camera modules for cars, it will expand the business through its sensing products such as AVM (Around View Monitoring). It will newly enter into a relationship with business partners in China, and, then, newly launch the new markets in Southeast Asia based on the competitive prices.
When it comes to the communication module business, the company will expand its FEMs (Front-end Modules) into new popular models, and reinforce the lineup of the products for flagship models. In addition, the company will expand the wireless charge module business into the automobile, industry, and infrastructure sectors.


The [Chip Parts] sector recorded KRW 443.8 billion, which is 18% lower and 7% lower compared with the previous quarter and the same quarter of the last year, respectively, because of the impacts of inventory adjustment of main business partners. However, it recorded a significant increase in sales revenue with mobile business partners in China because of the increased demand for high-capacity and high value–added items in Chinese markets.
When it comes to the MLCC (Multilayer Ceramic Capacitor) market for this year, the company plans to create relationships with business partners proactively in the global electronics markets by expanding the supply of the high value–added items of the next generation such as ultracompact new products and complex products with high functionality, and also by securing lineups for automobiles and industrial MLCCs.
When it comes to the EMC (Electro Magnetic Compatibility) business, the company will secure business partners by developing new products of ultracompact and ultrathin power inductors and enhancing competitiveness by applying low-cost new methods, and, at the same time, will strengthen the lineups of small high-frequency inductors and high value–added beads.


The [board] sector recorded KRW 360.2 billion, which is 9% lower compared with the previous quarter and 15% lower compared with the same quarter of the last year because of the reduced sales revenue in HDI substrates. However, because of the launching of new models of overseas business partners, the sales revenue in package substrates for AP of advanced specifications increased compared with that of the previous quarter.
When it comes to the package substrate business in the future, the company will steadily increase the market share by expanding the supply of parts for flagship models of the main strategic business partners and responding to the increase in demand for package substrates for CPU.
When it comes to the HDI business, the company will expand the array of models for entering markets by strengthening the design-in activities with strategic business partners through the development of new high-density products, and, at the same time, will improve profitability by stabilizing the plant in Vietnam, which is a foothold in overseas’ new markets.


※ Business performance by quarter

(Unit: KRW 100 million)

Category 2014 2015
4Q Annual 3Q 4Q Annual
Revenue 15,753 61,004 16,095 13,620 61,762
Operating profit 425 649 1,015 206 3,013
Profit before taxation 8,102 8,162 1,071 - 77 3,668
Net profit 5,578 5,027 - 91 - 166 112

※ As the comparable performance of the same quarter of the last year and of the previous quarter is rewritten by taking into consideration the suspension of the HDD motor business, announced on June 26, 2015, and the spin-off of the power, tuner, and ESL businesses, announced on July 14 of the same year, refer to the following information. (K-IFRS No 1105 Paragraph 34)

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